PTT senior executive vice president Chaiwat Chooritti attributed the hike to the fluctuation in world crude oil prices following the fall in US petrol reserves, refinery closures, and uncertainty in Nigeria and Iran.

The refined octane-95 petrol price is now US$87.12 (Bt3,029) per barrel.

Energy Policy and Planning Office director-general Viraphol Jirapraditkul said the price of gasohol could be maintained due to the decline in the price of ethanol to Bt18.62 per litre, from Bt19.33 in the first quarter.

Maintaining the price of gasohol 95 means the price gap with octane-95 petrol is widened to Bt2.90, from Bt2.50 yesterday. The price differential of gasohol 91 and octane-91 petrol also rises, from Bt2 to Bt2.40 per litre.

"The widening price gap gives an option to motorists to switch to cheaper gasohol at times of rising petrol prices. This should help them save money, while reducing oil imports," said Viraphol.

He added that when the octane-95 petrol and gasohol-95 price gap was Bt2.50 per litre, gasohol sales last month rose from 3.3 million to 4 million litres a day. Once the gap is enlarged, consumption is expected to rise further. "We are maintaining the gap and it could be further widened in the future."

Ethanol prices have been declining due to oversupply, which has led to complaints from ethanol producers. They have urged the government to scrap the retail distribution of octane-95 petrol to pave the way for higher production of gasohol 95, boosting ethanol demand.

But Viraphol said this could only be done when all auto-makers come up with the assurance that gasohol would pose no problem to car engines.

"The Energy Ministry has so far campaigned for higher consumption of ethanol and urged oil retailers to buy more. As all parties should help, ethanol producers should allocate the production quota among themselves to reduce their problems," he said.

Energy Minister Piyasvasti Amranand reiterated yesterday that gasohol should pose no problems to engines as fuel quality has been tested and six oil retailers - including PTT, Bangchak Petroleum, Shell, Susco and TPI - have vowed free maintenance for any engines damaged by its use.

Thailand consumes 3.7 million litres of octane-95 petrol per day, 13.12 million litres of octane-91 petrol, and 3.95 million litres of gasohol. The Energy Ministry has set a target to raise daily gasohol consumption to 8 million litres this year and 20 million litres in 2011.